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Old 01-08-2011, 15:01
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[COLOR="Green"]CIBC: compromise in the US is finally reached
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The pair USD/JPY jumped today from the 4-month minimum at 76.88 hit on Friday to 78.04 and then eased back down to the 77.30 area. The pair USD/CHF is also trading above the all-time minimum at 0.7853.

It happened as US President Barack Obama announced that the White house and the Congress have at last agreed on the plan to prevent a default. The agreement includes raising the nation’s debt limit by $2.1 trillion and cutting the federal budget deficit by $2.5 trillion over a decade.

The analysts at Canadian Imperial Bank of Commerce note that the tension level has eased as at the end of last week investors got nervous about the lack of compromise on the back of an approaching deadline. It’s necessary to note, however, that the risks of the United States losing top AAA credit rating remain high. Last week S&P said that if the spending cuts have to be lo less than $4 trillion to rule out the threat of the downgrade.

Currency strategists at Bank of America Merrill Lynch note that spending contraction will make the Federal Reserve keep the rates unchanged for a long time. In their view, there will be no hikes until US economic growth pace is below the long-term trend of 3%. Analysts at Barclays Capital think that the Fed will stay on hold during the whole next year.

According to the data from Commodity Futures Trading Commission, net bets against dollar rose to 310,222 contracts as of July 26 from 272,444 a week before.

[COLOR="Green"]BNP Paribas, JP Morgan: QE3 possible in the US[/COLOR]

Analysts warn that the US economy risks falling in another recession.
American GDP gained 1.3% in the second quarter on the annual basis, while the first quarter figures were revised down to 0.4% that is the lowest level since the recovery began in June 2009.

The Q2 GDP accounted for $13.27 trillion that is lower than $13.33 trillion peak in the final quarter of 2007. It’s necessary to note that the recession data has been so far revised down by 25%: according to the latest figures, during the period from the fourth quarter of 2007 to the second quarter of 2009 US economy contracted by 5.1%, while the previously reported reading showed 4.1% drop.

The experts see the future outlook for America as rather dim. Economists at Deutsche Bank lowered the forecast for the third quarter from 3.5% to 2.5% and from 4.3% to 3 for Q4. Barclays Capital decreased estimates for the third quarter and the following five by a percentage point.

Analysts at BNP Paribas and JP Morgan believe that the slowdown may make the Federal Reserve consider the possibility of the third round of quantitative easing. Strategists at Societe Generale think that the greenback won’t be able to gain much in the current conditions.
[COLOR="Green"]
Barclays Capital: comments on USD/JPY[/COLOR]


Analysts at Barclays Capital note that at the beginning of today’s trading day the greenback managed to rise to 78.05 regaining the grounds lost on Friday but then was stopped by the resistance and returned down to the 77 yen area.

The specialists believe that the 78.05 level will now represent the key obstacle for USD/JPY. As long as the pair is trading lower, it risks falling to the record minimum at 76.25 hit on March 16. If US dollar closed higher, it will be able to rise to 79.35/60. According to Barclays, the first scenario seems to be more possible.

[COLOR="Green"]Commerzbank: EUR/CHF keeps falling[/COLOR]

The single currency once again renewed the record minimum versus Swiss franc falling to 1.1262.

Economists at Brown Brothers Harriman note that this means that the potential resolution to the US debt ceiling will turn the market's focus back to the euro-zone peripheral nations.

Technical analysts at Commerzbank believe that EUR/CHF is on its way down to the support line of the downtrend from April to July at 1.11.

According to the bank, the pair will find support at the psychological level of 1.10 and then only at 1.0775.

[COLOR="Green"]UBS: forecasts for USD/CHF and EUR/CHF
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Swiss currency that eased down versus the greenback after the news that US authorities have reached compromise on the debt ceiling, has once again renewed the record maximum.

Currency strategists at UBS note that franc remains near all-time highs against all of its main counterparts as the uncertainty levels are still high.

According to Switzerland’s Economy Minister, the appreciation of the national currency isn’t temporary and one should expect it to decline soon. The official underline that this would affect the country’s economy. In his view, the unemployment is likely to increase.

UBS specialists give the following forecasts for USD/CHF and EUR/CHF: 0.86 and 1.20 respectively in a month and 0.89 and 1.25 – in 3 months.

[COLOR="Green"]The unemployment rate isn’t likely to decline [/COLOR]

The majority of analysts are rather pessimistic about US Non-Farm Payrolls data due on Friday, August 4, at 16:30 (GMT+4). It’s thought that the payrolls won’t rise high enough to reduce the unemployment rate.

Economists surveyed by Bloomberg News expect American employers to create 90,000 jobs in July after 18,000 in June, while the unemployment rate is seen at the same 9.2% level.

Analysts at ING Bank note that the US firms and households are very cautious due to the high uncertainty and the companies seem to be very reluctant about hiring new people. The shortage of jobs will likely affect consumer spending increasing the risks for the economic growth. Consumer spending added 0.1% in the second quarter, the smallest gain since the same period of 2009.

Analysts at Pierpont Securities note that for the unemployment rate to remain unchanged payrolls have to add 125,000 a month, while in order to reduce it by percentage point over a year they should increase by 200,000 a month.

[COLOR="Green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets
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